OTTAWA -- A proposal for a massive Labrador hydroelectric project has received a federal loan guarantee but critics say the government should have waited for an outside regulatory review before it backed the plan.

The loan guarantee, delivered by Prime Minister Stephen Harper in Labrador on Friday, supports a plan to generate power at Muskrat Falls on Labrador's Churchill River for Newfoundland and Nova Scotia. Harper promised to support the project during the 2011 election campaign.

The federal NDP also supports the plan but believes "all provinces should have access to a loan guarantee for large energy projects like this."

Members of Quebec's National Assembly passed a unanimous motion condemning the announcement Friday, and suggest it is bad news for the Quebec economy.

Hydro Quebec did not receive federal assistance to build its network.

"I know there's some opposition in one province, but I think this is genuinely welcome," Harper told reporters.

Watchdog groups, including the Canadian Taxpayers Federation and Democracy Watch, wanted an independent regulator to dissect the project before the feds backed it, but Harper says the government will continue to go through "all of the required reviews."

"The risks on the loan presented by the project are extremely low to the federal government, so we think this is a good deal all around," he said.

A federal guarantee will allow the government of Newfoundland and Labrador to borrow money for the proposed $7.4-billion project based on the federal government's credit rating, which slashes the loan interest rate.